tv Aspen Institute Discussion on Economic Opportunity Zones CSPAN April 16, 2019 3:33pm-5:07pm EDT
division and subtraction. the goal is to bring as many people around a notion of a greater america where everyone has a shot. i want to thank you all here at sc. it is always great to be here and i know you tolerate me even though i am a bruin, i love being here, it is a great university and i thank you and the center for the political future. political past, given the last election, but i am always going to fight for a better future, so thank you very much. mr. madrid: thank you very much for your time. [applause] [captions copyright national cable satellite corp. 2019] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] >> we take you live now to the
aspen institute in washington dc. a new federal program is under discussion, called opportunity zones, aimed at increasing investment in creating jobs in low income communities. hosted by the aspena new federa, the introductions are underway. in 2013 when we started, the unemployment rate was about 7%, now around 4%, substantially lower. the poverty rate is down over two points. the last i saw was in 2017 it downn -- it was at 12.3%, from 14.5%. most of the measures would say our economy is stronger than it was six years ago. but while our national statistics indicate a robust this economic success has not been felt uniformly. many communities feel left behind by today's economy.
materials background highlight, many communities are not wrong to feel this way. thanks for out sharing these materials for background for the event. can see from those materials communities designated as opportunity zones are doing markedly less well than the nation in terms of economic measures. so the conversation about economic opportunity zones focuses on communities that have been left out. this is relevant for us in the economic opportunities program. we really to day work focus on communities in need of better opportunity. we are engaged in questions of how to advance the quality of economic opportunity available for people so that all people in the united states can live and work with dignity.
focus on opportunities for people to connect to work and and ford jobs, entrepreneurship, how people can start businesses, and participated in ownership of business assets as an economic opportunity strategy. we can focus on how expand opportunity in a way that is inclusive and addresses long-standing comic divides along the lines of race, ethnicity and gender angiography. of opportunity zones highlights these issues. i'm delighted we have you here to have this conversation. before ruby gano would like to note we are recording and livestreaming this conversation and we welcome our colleagues from c-span here today. phones, butce your please do tweet during our
conversation. our hash tag is talk good jobs. i would like to thank prudential financial, walmart and forward on dacians for their support of the working in america series. we could not do this without their support and partnership and we are extremely grateful to them. we have a fantastic panel to have this conversation. .et me introduce them as president of concerned capital. er is from the new jersey economic development authority. maurice jones is president and ceo of lyft.
kennen is the director of research at an innovation group. joyce klein will moderate today's event, she leads the economic opportunities work and is director of our field initiative. joyce. joyce: thank you. i would like to add my thanks to maureen for all of you joining us are today. thank you for putting up with line.ng maureen mentioned we have done 36 of these events. this line is the first time we haven't provided lunch. [laughter] we are glad you are enjoying the snacks and glad you are with us today. in 2017 congress passed the investing in opportunity act, which created a new structure and incentive for investing in low-income communities.
those are opportunities we are here to talk about. the new incentive has generated a lot of interest and discussion among those of us who care about what happens in the lives of low-income individuals in the communities where they work. there has been a lot of work done at the state and local toels to lay the groundwork select the areas that are opportunity zones, and shape and support investments there. toh any strategy looking increase investment in low income communities, the question is not just where development is going to happen, what kind of development, but also who benefits from the investment in those communities. so what kinds of jobs are being created, who gets those jobs, how good are those jobs? if we see investments in real estate, who is investing -- two
is benefiting from that growth? program is the economic opportunities program here at aspen. we are interested in following the development and implementation in response to this new tool we have at our disposal. in the past couple of years we have really focused on two issues. one is issues of job quality. our economy has recovered in the past couple of years in most places, but we really need to about the quality of jobs being created. when we talk about quality we talk about decent wages, benefits, our jobs accessible to about the quality oftransportae predictable schedules so people can manage their personal lives and responsibilities in addition to their working lives, are there opportunities for mobility for people? in the work i lead around business ownership, one thing we have focused on is how do
disparities into who is able to open businesses play into critical issues around income and wealth inequality and in the u.s., particularly around racial lines? we talk about the disparities and overall wealth levels and network levels of black and latino families relative to white families. we know white families have about 10 times the wealth of black and latino families. important to look at what kind of assets people own and how those assets appreciate, how they create diversification and household balance sheets. one thing we have been looking a lot at is the fact that, for many black and latino families we see lower levels of investment, lower levels of assets, we see more concentration in assets that are
depreciating, like cars, or housing assets that have not recovered in their value since the recession. so thinking what kind of assets people own is important in thinking about business assets. opportunityk about zones we think about investments in real estate in low-income communities, businesses and low income communities, are those going to grow into is going to benefit from the value created in these investments? that is what we are here to talk about today. our panelists are qualified to talk about this, not only because they played a role in creating this idea of opportunity zones, but they have been on the front lines of trying to set the stage for how this new tool might unfold over time. we will be in dialogue for about 45 minutes and then open it up to questions. if you are watching virtually, just tweet those questions at
jobs #. good we are not doing a primer on opportunity zones. you andmaterials for information from lift and and the -- from lyft economic opportunity group. i will start with kennen. ideahis organization, the of opportunity zones was response to really important research they did at looking at a lack of dynamism in many communities in the u.s., and a potential response. has wife also had a baby two weeks ago so we are going to get
him before he falls asleep. [laughter] congratulations. of the an overview problems you saw and what you thought opportunity zones are a solution. : the university of minnesota last week released research that found there is not a single metro area in the u.s. in which a poor person is likely to live in a growing area than a declining one. that is a profound statistic. it is adamic -- it is a damming indictment. it stemssearch at dig, from our distressed communities index which classifieds zip codes on economic well-being. 2007 to 2016, the bottom 1/5 of distressed communities have lost 1.3 million jobs during that 10 years.
there has been no recovery from the great recession from the people who needed most. on the flipside, prospered communities -- prosperous communities have seen a job bonanza of net 3.1 billion jobs over that same time. so essentially we channel all our growth energy to people and places who are already doing well and we channel very little to people and places you need it most. so opportunity zones is really designed to smash that equilibrium, and it is a bold policy that tries to meet the challenge at the same scale of the challenge. make theigned to market work for communities as opposed to against them. i think we are saying already. -- seeing already that investors and even community them's desk
communities themselves, as they reevaluate themselves in the wake of this incentive, they see all the hard work and entrepreneurialism, they are seeing the good zones many communities have and they are areing with investors that going to unlock value in places that for a long time now, some places decades, have been a community where no investor is going to put their money if they assume it is going to be declining in value because no one else is putting their money there. zones is a jump ball, the federal government provided the ball and the loose framework around how to play the game. the states drew the lines on the court but now it is really up to stakeholders, communities and states in the private sector and folks to be entrepreneurial and
creative and do something with this ball and see what they can create from it. it is in a state of becoming, and i think that is really exciting and it is important conversations like this are convened so more people got involved and figure out how they can make something from what has immense potential. >> we are going to talk about the potential for this new tool that is just about to emerge, and many ways. maurice, you have worked at the community development level, a lot of work at the state and now are withs and the local initiative supports organization, a national organization that uses investment as a tool to build more resilient communities. so you have a new investment tool potentially. what is your take on what that
means for the communities you work in? the potential is tremendous for a couple of reasons. designed tool that is to attract to these communities investors that, for the most .art, are not there right now whether it is $6 trillion or several hundred billion dollars, i will take it. these are not folks who are right now, either institutionally or individually, who are playing at a substantial level in the communities we are talking about. so this tool, if nothing else, gives us an opportunity to have a conversation with those investors. that is pretty substantial.
secondly, this is equity. this is a tool designed to substantialty for a period of time. if you're going to truly help people in these communities transform, patience is what you need. this is about patient equity capital. so in those two senses at least, the opportunity here is tremendous. now, there are risks and i am sure we will talk about that as well, but potentially this is , this is the largest tool for the kind of work in the communities we are talking about potentially,seen, with caveats that we should return to. host: terrific. thank you. ty, opportunity zones are
designed to incentivize private locall, but state and governments are going to play a big role in what potentially will happen. you have spent times in the city -- spent time in the city of new jersey. pointfrom your vantage how you see the value of opportunity zones? ty: it starts with the leader and we have a phenomenal leader in governor phil murphy. he has a vision. he focused on a stronger and fairer new jersey and we took that to heart with everything we are doing, not just the economic development plan that we put forward but also with opportunity zones, making new jersey more business friendly and making us the state of essay state- making
of innovation. -- making us a state of innovation. so you have the new essay state of innovation. jersey economic development authority, the new jersey department of community affairs, which touches every municipality, you have the agency mortgage finance out what the most important thing is. and for us the most important thing is ensuring inclusivity and equity when it comes down to economic development. this is personal for me because i am a girl from no work -- a girl from newark. but it is not just newark, it is all the cities, and our goal is to identify the best zones. overlay with transportation to identify 100 69 zones we were able to select. is to overt process
communicate and over engage every stakeholder and community you can. we worked directly with municipalities through economic development directors and identified zones, but if it didn't fit with where there development was going, we listened to the process and made some changes. so far us at the statewide level, it is still very intentional about the work we are doing, lining up all our resources so we are excited we were able to launch our one-stop shop. this website has something for everyone, investor, developer, stakeholder, all that is on the website. i think we have created this
interactive map, which is the best map i think that is out there in the nation. it has about 67 layers and lines up all the incentives we have. if you are an area that needs if it isment, transit-oriented development, it has been lined up on this app so that everyone from a beginner to a developed or has access to what resources are there and how we can filled up on what we have started. so you're trying to figure out how we can have this happen not just exclusively on the private side, and how we make that visible to developers and the community. l.a., you have worked in in a bunch of different roles under focus right now is on business development and thinking about how you take businesses that exist in your communities where the business owner may be retiring and making sure those community -- those
businesses stay in the community. tell us how you view the potential value of opportunity zones in that equation? >> we think there is a great to helpity here businesses grow, actually investing into an operating business. hopefully regulations will come out that allow us to do that. but in the case that it is not and it is more a relative focus, we see it as an opportunity to view businesses that are seated with capital. host: depending on how things play out, there may be an important source of capital, at least for the real estate where those businesses are? as: having conversations
with people in the private equity space to locate business and build a workforce by recruiting people from that area . again, a great opportunity there depending on the regulations. the law was created in 2017. there is a regulatory process. ken is going to catch us up on where we are. ken: we are not as far along as we should be. we have draft one of three. beenegulatory process has slower than anyone anticipated, especially given there are so many dates certain elton to the statute. -- so many dates certain to the statute.
some of the very fundamental basics took a year to do. numberare waiting on two, which we are told should be dropped imminently. eminent is relative, yes. [laughter] -- we are looking for proactive intent and understanding on behalf of treasury that opportunity zones was intended to deliver that holy grail of community development capital between scarce equity capital for businesses, not just real estate. and number two, that opportunity funds are meant to be funds, and not opportunity zones shell corporations, like a structured havethrough so you can
investments in multiple assets and potentially multiple places. this is important for operating businesses because they fail, they grow out of zones, you might have to divest from them to put your capital elsewhere, so for this to practically be available to people who want to see new businesses and employers and wealth creators and get maximum impact out of this, it just needs to be workable there. that iters are crossed is going to be the threshold question for us, whether this will accomplish what we all hoped or if it is going to under shoot its ultimate potential. and part three of the regulations will address data collection and the fund certification process, all the stuff that is giving people a pr heartburn is coming and it is coming last, which is really annoying. [laughter] and that is kind of the last gig
right now. for those of us focused on economic and business development, this next part is really important. kenan: yes, it is make a break for proponents. host: anyone on the panel of any idea of what you're looking for in terms of regulations? >> just looking for more clarity. if there are more guardrails put in place, that is something we care in terms of about constantly in municipalities. this is great, but how do we ensure the development and resources on funding flowing and here is going towards its intended measure? that will exist until it is resolved and i'm glad that you are looking at that. but it is states and municipalities an opportunity to create a framework to measure what social impacts and environmental impacts are being measured as well. of the silver one linings of the regulatory delay. it has given states and
localities time to catch up and get ahead of the market. that wealth is stil -- that will facilitate good outcomes. i think the time frames right now that we are working with, given how late the actual rules are, and the clock is ticking, you are supposed to invest within 180 days of gains, i'm hopeful we will see some evolution on the timeframe. otherwise, only those places most prepared with shovel-ready projects right now are going to that would be inconsistent with the spirit and intent of the solution. >> if you are doing at within
180 days, that might not give you time to leverage, so you may be in a position where you are just putting all equity in a project, and if it doesn't move forward and you are stuck, it creates a lot of issues, not so the timing is going to be really, really he. >> we will see what things look like. >> we talked a little bit about the potential. maybe we'll get into some of the pitfalls or challenges. i will come back to you. we've talked about the fact that local and state governments are key to how this plays out on the ground. thinking about a state like new jersey, you got trenton, you got big cities, but you've also got a little -- a lot of small municipalities and don't have a lot of development infrastructure, don't have big
teams in place. thinking across that spectrum of communities and what might work in some of the smaller, more -- more rural neds. fixed there are 565 municipalities in 21 counties in new jersey. you will have a different approach to each meanness about the you are working with. resources that we have in place, we have the department of community affairs which has local planning services that touched each and every musicality, small or large. specifically with opportunity zones, using all of our resources to meet people exactly what they are. we are going to the communities that need the information the most and walking them through the process. for smaller communities that have part-time staff, you have to be really intentional. a lot of what you are doing at this point is building up capacity and helping them where
they are. one of the great things we're focusing on isn't innovation challenge focused on opportunity zones, suitably to help municipalities small and large buildup capacity, help them with drafting their investment perspectives. it's not one-size-fits-all. it will be very intentional, going from the smallest to the largest these. i would important a impress upon in event is making sure this zoning and planning boards are on point, making sure importance,and the and we have to figure out a better way to streamline that process. that will be a huge win. >> people have to be ready to move and make decisions. some of the concerns with
opportunities, people are concerned about things like gentrification or placement of -- displacement searchmedia's. i'm wondering if you can give us how community leaders should be thinking about what kind of investments are going to happen what might be helpful. the key factors is lack of transparency. there is no requirement for the person taking the credit to say i made this investment, this is happening in my backyard. it could happen next to you and you would not know. that's a big challenge for communities and the people who live in that area. one of the things we have been talking with communities where i --at his make sure that
there's a process you have to go through. there are so many checks and balances, making sure people are paying attention to what is happening. where we are in southern cal on you, a lot of places are not being redeveloped because it takes a lot of equity and a lot of money, a lot of venture capital, something some happen. there's always the potential to say, who are you, what are you doing, and how can we be involved? there is a whole toolbox of economic development tools available to them. a developer will come forward and say, i'm doing this, and here's how we can help. >> super helpful.
maurice, you and your organization have long worked in the kind of communities we are trying to stimulate development in, the once have historically not been interested in which is why you are excited about this aspect. we heard you talk about that in what can we learn from devious thisegies that can make more successful, and how are you thinking about what might be possible in the communities you care about, and if you could talk a little bit too rural as well as urban, that would be really helpful. but i'm having more and more senior moment, you may have to remind me of your wary. what was your question? [laughter] there are several lessons to learn. tools that there is no one that is the cure-all. there's a lot of hype about
opportunity zones. rightly so, i think it has a lot of potential. it will not by itself transform the communities that we are talking about. there is the fed chair he used to say irrational exuberance, we need to have more rational exuberance about what the real opportunity is here. it has tremendous opportunity, but it has to be paired with a lot of other work to truly transform the communities that we are talking about. you still have to invest in the most important asset in all of these communities, it remains the people. thetill have to invest in people possibility to earn a living at livable wage and beyond.
you still have to invest in great schools, in parks and recreation, transportation. opportunity zones are not going to cure all that. they can be a partner to that, but not the cure-all. is,first thing we learned you've got to be multifaceted in this work. say a second lesson for need that you are going to -- and this is connected -- you are going to need multiple all kinds of capital to do the work. you are still going to need pieces.ropic you still will need technical assistance in most of the places we are talking about in order to maximize what opportunities own capital can do.
thirdly, and i want to connect this to rural, at the end of the day, in order for opportunity zones to truly maximize their potential, you've got to have a pipeline of investment projects. that's going to be the main thing. investors will come if you can mitigate risk and give them projects. is capacityans building in these communities, and that's going to be particularly important for rural america. it's actually do most important investment you can make. if you don't do that, there won't be opportunities own opportunities. >> we got to find a new word. let's if you look particularly in rural areas, it is helping rural areas with rock band
infrastructure, helping them put together projects that are project ready in investable. pre-investments are what you are going to have to do with most urgency in order to maximize this. this, localsage on ,ggressiveness, local control local ownership, local coalition, that's going to be the game changer. waiting for anybody at the federal level, anybody outside of your community, is a futile wait. the way you ensure that this folks ata coalition of the local level come together and own it.
that is what you are going to need to do. those have been some of our more important lessons. >> did you want to add something? >> local municipalities, they've been doing this work, they have been in the field were so long. they are the ones behind the scenes that are moving this forward. with that, make sure they know what incentives are available on a state level. some are focused on growth, others are focused on development. what we are doing is ensuring whatever we are focusing on, opportunities are linked to that. if you're looking at low income , we aretax credit
ensuring that if you development opportunities own, you get double -- opportunity sound, you get double points. we are hyper focused on that and where they are as well. >> what our focus really is on, what we see as an opportunity, because of the large number that are retiring, the opportunity ofe can be a great source funds that would allow for those businesses to transition from -- nothingg owner keeps jobs local like local ownership. so the opportunity zone as a program presents another conduit of capital. it's just a matter of making
sure you have that pipeline. also that you understand what your local market is, the vital businesses in your local market. unfortunately we will see a lot of businesses closing because the owner wants to retire. so we need that capital with an ever. -- more than ever. >> they want to see that the city is in the game, that other people are dedicated to this opportunity zone being a success. thatis one place philanthropies can engage. also seen at the state level, new jersey, colorado, minnesota, come up with planning grants, a lot of rural areas are on a shoestring budget and they
cannot come up with their own opportunity zone. that is an easy way to bridge the gap. some have sprouted up to allow rural areas to operate through it and source projects through platform they are all sharing rather than replicating it individually. pitfalls, the one big when i'm worried about is that -- it doesn'tne jump right in and see itself as the critical connected tissue. we did comprehensive benchmarking of opportunity zone s and found there are more adults it do not have a high school diploma than have a degree. that is a lot of workforce development and connective tissue that needs to be forged
to make sure people can access the jobs and are able to directly feel the impact of these investments. xd think it offers another opportunity for states to look at apprenticeship programs and force municipalities to give it an shift how they are doing things as well? >> it will be easier if the market is working in their favor again, if there are jobs to be had. >> we also got some good advice about how to make really work. i'm going to ask what is maybe the most innovative ring you have heard happening so far in terms of a potential project or way of organizing around this work? i'm excited because i grew up in industrial region. opportunity zone seems to be
working for remediation and development. epa comment letter was one of the best pieces of policy writing i have seen in a long time. an old dupont chemical site has been condemned as hazardous for 26 years in nothing's happened, and now opportunity zone capital finally close the deal. there's an old building from a life insurance company that is very solid, it has been into for 36 years. i just found out between the city, alabama, and opportunity zone financing, it's going to be converted into apartments dedicated to retiring citizens. some like that is innovating and exciting. everything's been
into for 36 years, it would not have happened without the opportunity zone. i want to see more of that. >> the city of indianapolis is of together a consortium public sector officials, private sector officials, philanthropic investors, and they are doing a couple of things. one of the issues we've got to make sure i'm in this is showing my bias with opportunity zones is to know who is playing and where they are playing. they have created a portal to create transparency regarding investors, regarding where projects are in the project pipeline, and in an effort really to try to match investors with projects that they want to see done, they want to see pushed across the finish line. this did not require a whole lot of capital. it required a coalition of folks
from the public and private sector to come together to mobile ownership fees. for the long game, that is one of the ways we are want to have the kind of results that we want from this endeavor. >> that is a great example of that. >> we are focusing on something similar, connecting investors to projects that exist in local communities. there's so much great stuff happening. when i see young folks really leaning into this work, i get really excited. believesan from newark in this, he went to harvard, he came back and is really leaning into this work. like excited about groups
golden door asset management. either all things that are happening in new jersey, a lot of them are happening right in newark. for me that is a personal point of ride as well. weren't the more exciting things for me, i've been talking with a private equity arm that will be creating a find that is focused on creating impact with the workforce. they are looking at identifying businesses that have growth potential that want to relocate .nto an opportunity zone the opportunity zone capital creates a space were they can do that over time and build that
up. i like that it is turning impact investment almost on its head. >> and how to give then that ownership opportunity. that is fantastic. >> we will do one more quick round of questions and then we will open up to you for your thoughts, so start thinking about your questions. so lightning round, both here and hopefully online, we have people who are thinking about how to connect to this issue, maybe on a local level, how they get engaged. what is one idea, principal, message you want people to keep in mind as they think about how to connect to and support the kind of stuff that might happen because of opportunity zones?
you look like you are ready. >> it is a tool, it will be what you do with it. communities need to realize that they don't get railroaded by investment, ine think that individuals should to action and really try to do something with it. it is rare that a brand-new, bold policy innovation comes through from the federal government, so let's make the most of it. >> i want to act, just remember first and foremost that this is an incentive that is about. lose what this is
supposed to be about, helping underinvested, just invested communities, to transform those communities. that's the first thing. secondly, terms of how to get connected, this is going to again show my bias, but go out and try to i an organization to be part of, to work with. they are on the front lines, working with very people they need to have some expertise addt, if you're going to value to their journey. >> they know how to do that risk mitigation that you talked about. that's absolutely.
>> the impetus behind the program is on people, and also places. is to drive capital into distressed communities. bases to activate these in places that have not been done for. we have real opportunity over and over again to make this into something that is credible, something that changes communities dynamically with their input as well. l.a., the areas that were destroyed during the civil unrest of the 1990's that have not been rebuilt. there are areas from the 1960's that have not been revealed. i think it represents an opportunity for the community to take hold and say, we want to see this, something that is
reflective and representative of us. says inr of stockton the solution that doesn't include us is not about us. attitude.ot to be the investment, wee are worth figuring out how to make these happen. they are spending their money someplace. they are putting gas someplace. that is the perspective i would like people to have. we are partners. i found that most developers like having partners that will support the project and help them understand healthy impact implicated. >> we will take some questions. microphones, so folks
will bring those around. those ask you to wait for . so the people who are listening remotely can hear them, so i won't have to repeat them. i will probably go back and forth to different sides. >> two quick questions. one, you talked about -- you gave a lot of great pearls on how local leaders can essentially sell themselves. i saw website in duluth, minnesota that is one of these platforms to connect capital to investment opportunities. how do you keep 80% of what is going around to 3% or 5% of the zones? how can more of those local areas do more to get themselves out there so that that doesn't happen? pd this idea around the human and the fact that we are
starting with real estate. i can see that $30 million supporting a formal housing project, but what about preservation? how do we keep never goods from being gentrified and people getting displaced? can we look at it in the way were looking at preservation, perhaps creating a lending pool so that property owners can rehabilitate rather than getting demolished and replaced with new development? >> a great question. to a point goes back that we talked about. there is this risk that 4% of the zones will get all the investment. thatrimary way to mitigate , again, is for local folks to come together and get funds ,tarted in those communities
for those communities, marketing those communities, putting together the philanthropy. it really is about getting local toership and local buy-in investing locally. you can appeal to folks to invest locally. you've got to get prepared for them to have something to invest in. all capse prevent this to a few places is for local folks to not be agnostic about this. for them to truly be aggressive. i am headed to duluth tonight with the hope that there won't be a weather event, but part of the reason is, demuth is a town that is attempting to do just this. they are trying to mobilize the fundsion, put together
that will invest in investable projects there. it starts there, when investors see folks making money in places, they will call. but local is where it all starts. >> absolutely agree with that. work to understand what the attraction is to your there,ty, why are you what your needs are, then you can quantify what that need is a new market that. and if the opportunity zone doesn't come, you still package that, you are still ready to go and find other sources. that's part of the challenge i had when i was working in economic zone for a city. now i think one the great
it'sits of this program, forcing people to really start thinking about what they want to see and where they want to see it, what part they want to have. addne thing i would just on, what we did with the desk nation of our cities as we had -- we added a transportation overlay, and i think that as been really helpful. your economic development directors are working together to see how they can work and grow to support these opportunities. it has been exciting to watch because it is a new way to do, looking at how we can take this bigger in that way as well. thanks there is money people are trying to delay capital gains taxes on. --is the from your community people from your committee.
there may be people locally that want to invest love elite but they won't know about the longer-term opportunities unless you have made it easy for them to get to. cultivating an investor ecosystem is important. you want people who have money committed locally. we ran some numbers. kentucky, alabama, west virginia , $4 billion of capital gains by individuals alone realize in those years. the stock of unrealized capital gains in the laces is even larger. the money is out there. opportunity zones are chance to make it local again. >> a question here.
>> i'm curious, from the discussion, the concern about investors. currently big that happens to many startup businesses as such is that they are all centralized in major metropolitan areas, new york, san francisco. is there concern about i.s. from investors who are not as familiar with areas such as central mississippi, and similarly, since there are 51 different marketplaces for these opportunities and management to you have all these different marketplaces just trying to attract investors. >> bias would not be the word i would use here. lack of information, lack of knowledge would be, yes. think it is getting to your
very point. the question is, what does a duluth do to market their opportunities, right? the market is only as good as the information about it, and is a relative lack of information about some of these other places. near alexandria where there is a relative lack of nation about the county i'm from in virginia. there are lots of great projects. you all should be rushing there right now. the question is what we do so that a lunenburg county can compete. there's no question there are more projects right now that are investable in alexandria than in lunenburg, but there are investable projects in lunenburg as well. that's going to be our challenge
or opportunity. >> i think it is the market, put it out there. >> talking about new jersey ,eing the state of innovation thatovernor -- you get there are so many other opportunity zones nationwide, but haven't a governor who is actively talk about what is happening in his state has been a real great opportunity for us. we've highlighted the different opportunity zones because there is so much attraction that is happening there.
new jersey is attracting a lot of attention and we are excited about that. >> good afternoon. i had a question. how do we get real estate in the business of borrowing? >> think a lot is dependent on the regulations right now, a chilly. how many people can get involved and benefit from opportunity zone investment, under what
scenarios might be an investment company? all those questions are still unknown. that is one of the biggest challenges a lot of us are grappling with right now come the fact that there are so many possible applications of this and we don't know which ones are done. >> and where the real estate between -- the split between real estate and business is. anyone else want to add anything? in the front. >> i'm cofounder of an ecosystem building organization. i appreciate that you all mention people and play. i know policy has to be right there. there is one opportunity where a lot of organizations went after hq2.golden keys of amazon there are resources to mobilize there.
i think for that comment on the real estate meeting the business, invite readers to the table. they are demanding it google, but they put down roots. thank you all for pointing that out. one question is, with the investors looking at real estate on the i having that guy operating business side, is there a timing window where we might miss really good opportunities to do good things in place for lots of people? once people realize the bulk of the incentives are still there, they will have plenty of reasons to invest in opportunity zones. the tenure capital gains exemption, even if you invest in 2017 and hold them for 10 years and beyond, you will be able to enjoy that benefit.
i had forgotten where i was going with that. [laughter] i used to be the secretary of commerce and trade for the state of virginia. most folks in economic development know that the best helping the buck is existing businesses retain, expand, and helping them launch. it is not going after the amazons of the world. but we don't get the press for that. we can talk about that at another time. >> i am from association for enterprise opportunity. i'm wondering what your opinions are on a community benefits agreement to mitigate
gentrification as well as promote economic opportunities or committee members, and the role of mitigating extracted practices, taking wealth away from the communities. thank you. i will just jump in. whether it is community benefits agreement, --, again, putting together that have a contents on whether it's public policy -- i think it is actually all the that, that it is important places have these tools to deal with the risk of development. and the risk of gentrification or displacement, i should say, is not unique to opportunity zones.
it is part and parcel of every development journey that we have not. thus, it is important that you at the outset, as you are thinking about taking advantage of the development opportunities of opportunity zones, you are also thinking about mitigating displacement risk as a result. i think all the tools that you have mentioned are tools that should be on the table or that. >> it is policy and people, and enactatively, cities can legislation. way legislatively to ensure that development is happening at the pace we wanted to happen at within your perspective municipality. that as highly unlikely mandate for community benefits
will come from the federal government. [laughter] >> the action there is going to be local. curversey is ahead of the on educating their municipalities and responding to that. there are number of occasions -- organizations that are dedicated to making sure that people are prepared themselves. >> another question here? the gentleman right there with the glasses. >> i am cofounder of a nonprofit .n seattle i wanted to ask a question about whether opportunity zones could the innovation zones. the challenges that exist in opportunity zones, transit problems, who desert, health
care act is, water infrastructure, energy, affordable housing -- it is a long list. they are also innovation opportunities for new kinds of product, services, and systems. i'm looking at how to build a partnership between opportunity zones and the community with corporate r&d centers, the this is a market for innovation. there's an opportunity for some of these two leapfrog into a whole new kind of world, with the technology that is available. so how do we build that connection and water that i would get the needs communicate the innovators in the united states? >> that is beautiful. we hire you. you are already thinking about it.
>> that goes back to what i said earlier. opportunity zones by themselves are not going to be the cure all. but if we are able to do exactly what you said, use it as a chance to have dialogue with withr ed, with technology, health, with local government, with entrepreneurs, use it as a tool to talk about the comprehensive work that needs to be done. then you've got a home run. you are going to need hoax who are good at selling to do this. at the industry day, this is a marketing job, and it is a curating job. this goes back to what i was suggesting earlier, it means that that will be tougher to do in rural america because it is tougher to find that kind of
capacity. but seattle, no excuse. this should be done. so i am holding you to it. >> we have vast parts of our country were economic development or growth is limited . convince anng to investor that it makes sense and there is an opportunity for them to make money there, right? one of the best ways to do it is through your track record. thereis great opportunity , but it will take not just collaboration of all the different workers, but having them is ask the language of invest to give up the sense of opportunity.
but investors can hold their investment through 24/7 so they can address manipulation. communities and groups can really get together and show what commitment there on to make, how this will create a new urban fabric and get people to buy into that long-term vision. providence, rhode island, they tore down an old highway and ,ust have a mile of dirt looking forward to reconnecting resignation. haveis is also where you an entrepreneurial mayor or city manager or county manager -- this is what they should be doing. sweetening the pot to get those other sectors to play just like
you suggested. that is what i think the real opportunity is here. >> let's take your two questions and we can take both of those. >> my background is commercial real estate investment, but i'm also vice chair of the anacostia business improvement district. it is often lost in these , and that at the end of the day, these opportunity zones were all chosen because they were distressed. they didn't have good jobs. they didn't have good economics. that is why they have not been invested in. there are occasional alibis were there is not enough information to draw capital.
investors have learned that they cannot afford new developments. there is not jobs in -- invest in that. it, retailersify go over there and say we cannot make a living on this. there's a lot of talk about working together. these are all necessary ingredient. at the end of the day, they all have one thing in common. they don't have enough good jobs. enough good jobs, developers will flock there because that how -- that is how road over.re see enough discussion about how do we get good jobs here. that's got to start at the state level.
someone has to go and deliver questions that grow the entrepreneurs locally. that is a start. you have to get some really good jobs that can justify new construction. otherwise it is just relying about jobs. >> i did promise you would get a lot of questions. my question is about sustaining a national conversation about -- onend equity inclusion and is media press coverage around this. if you wish there was a new want for some aspect that would enter that coverage, what would it he? you have described a rich coalition of mergers and
partnerships and people coming together to commit a place? >> what is the role of philanthropy supporting some of the energy coalition? >> i would love to see a lot more being written about how the communities are going to be from the community perspective. mostly we've heard from coming from the lawyers or parenthesis or captions. that would go with the first question. >> philanthropy can jump on board whenever we are ready. i think that states are moving forward, doing innovation challenges.
once you do that for a meeting healthy, that will be long-standing. you are teaching them how to fish. that is something that is incredibly sustainable for the long run. philanthropy plays a very important role. it is time for them to jump on board 100%. we are focusing on high job growth and high wages as well. proposed, since we are hoping it gets to the legislation. >> there is no argument that we attract more jobs to anacostia, or anyplace like it. the potential to attract jobs,
we already see downtown up here., growing big out of big cyber company coming that's going to locate right there and bring 250 plus jobs. you got the city department of housing and community development that is right on the other order. whole bunch of groups of small entrepreneurs that are beginning this tourney and you are just across the bridge from bringing this up. so guess, you are right that we need to get jobs there. , or their jobs there assets to get the jobs there? absolutely, but you've got to be very intentional. just like we discriminated against anacostia to create some of what is fair, we've got to now be just as proactive and
aggressive in trying to attract the jobs. so i don't disagree with that. >> [indiscernible] >> pick one. i'm in your you, illinois. illinois --r you, peoria, illinois. are they as great as anacostia? no. but all have assets you can build on. there is no question that there is a spectrum, but the notion that we have been around for 40 years, in opportunity zones alone, we have invested $2.5 billion. we have gotten every penny of that back. we haven't lost a dime. the notion that you cannot find
investable project is belied by our history. we need to do more preparation work. if you are in rural america, you down.o get broad-based that's a game changer for most of america. with commitment, we can do it. we sent it to the man, we can put rock band in galax, virginia. broadband in galax, virginia. the notion that we should turn our backs and say there is nothing there -- i want to be clear. -- you got toment want to do it, you got to have the will in the public and private sector. i can show you plenty of communities where it has happened. anacostia is one where it has happened to give me 10 years and let's go back over there.
do we have twitter questions, or should i stick with the room? released -- hud release and noticed asking how -- how federal agencies can support opportunities. >> have you seen that, and do you have some ideas? >> i know it is out, but i have not read it. >> others on the panel? >> [indiscernible] there are programs like rapid response that allow workforce development board and allow the local on the ground were, seeing them grow and access resource. incentivize or include policy that no tells those existing
resources. a lot of federal money goes out and record response money goes to every county in the country. conjunction.d in all these groups should be -- that would be business creation. correct there are lots of dollars coming out of these federal entities. sweeten the pot for opportunity zones. >> a question in the back. afternoon, i'm cofounder of the company called skills smart. conversation.he going back to the conversation
around community benefit agreements, what was at the heart of that is, so much of the conversation is around outcomes. about jobs outcomes, community benefit outcomes, but i haven't heard a lot about what is the rubric of evaluation or whether or not the project is successful? i think just return on investment. thoughts on what the appropriate valuation metric should be? when we had the press call, that was one of the questions that was asked. my responses, what is your perspective? who is looking at it? people who are getting the jobs will have a different answer. you'reend of the day, looking at the people who are responsible for it.
--hink success has to be allows one entrance to good paying jobs and in the communities where jobs are being created. it is not impossible to do, but it's a little more challenging. earlier talking understanding at the what the gas are and how they affected, being clear and intentional about what that means for our communities. >> the details on what types of investment and what investors when into what neighborhood, it's going to work for some communities and not others. that calls forge experimentation, so that is good. but we have to know what works and what didn't work.
the applications are really vast here. going to be hard to preorder they are say at the outset what this is going to accomplish. add, i think you are going to want transaction metrics and census tract metrics. you will need to levels of metrics here to truly measure what is happening and if we are accomplishing what we want. three quickto take questions and do a lightning round of questions. we have about five minutes let. you have had your hand up for about five minutes. the narratives i have heard
today are not unlike the narratives i have heard over the last 25-30 years. of optimismt form of what these programs can do, but it really doesn't get too many of the issues facing communities. i think that recently, water -- isment money was being now sanction. meantime times the city or the state tries to add to the pot, they often have to take from existing things that are going on. my question is simple, is what form oftalking about a adaptive resilience, or is it a form of cruel optimism? [laughter] >> we have a question here. >> i am a law student from american university in my colleagues and i are art of our school community in economic law development community.
i have a two-part question for the panel. i've heard from the panel that starts with the locals and the community. so how do you propose more community involvement from residents that you opportunity are throughout their communities. what percentage are already in place, such as community land trust that already involved community members and are currently working toward the same goals and -- that opportunity zones aimed to be, but want to maintain any and all roads within the community and the resident and provide opportunity for over ability? >> adaptive resilience are cruel optimism? on these issues with strategies they think they're working and get them to focus on opportunity zones that think
will be displacement generating. good question. who wants to jump in first? that'snumber of reasons, is why municipalities have to drive these efforts. they're driving the work and the conversations around opportunity zones. at the end of the day, when you are a public servant, you have to serve the public. those existing to these have to be part of the process, not cannibalized by the process. it starts with engaging and encouraging them but also for them to want to be part of the process as well. the municipality has to start taking movements right now to ensure they are >> opportunity zones are in law now.
it is happening. it'sest way to ensure that not just extractive, or something that the community finds undesirable, is for the community to get in gh -- to get engaged. what i tell folks on this is look, we cannot afford for you to be a critic on the sideline. you need to get engaged with this, because the law has passed, this is happening, it's already underway. it's up to us in the community to make sure that we are playing. topeople you are talking about incorporating zones into your strategy, unit to be able to talk to them in the language they are going to understand, and that is how they are going to get the return they want on their involvement. what are you going to do to make it interesting to them?
i don't think they are mutually exclusive, but you have to understand how they can fit together. [laughter] and good intentioned optimism. product of a zeitgeist. we see the rise of the rest happening -- real startups including places like incubators and all. see people have a renewed commitment, can we see this across the developed world. we are aware of a number of really great investment funds that are committed to investing in startups in the heartland that are just waiting. i think we will hopefully reinforce that optimism. and then, i think some
communities are at a turning point. [laughter] >> when wave of economic change or destruction has ended and we are entering a second one that hopefully will not be quite as concentrated as the prior one. >> i will try and be quick. we are at the precipice of an unprecedented transfer of wealth in our country, one we have not sing before and once he again for generations -- seen before and will not see again for generations. optimism -- kroll optimism. -- cruel optimism. i think we have leverage, like
the opportunity, active transfer of wealth, the desire and the growth in the economy to make a different this time. >> resilient optimism. [laughter] >> i want to thank are fabulous panel for this conversation and all of you for your energetic -- our fabulous panel for this conversation and for all of you for your energetic engagement. [applause] [indistinct chatter] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org]
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